Zidisha Forum

If a lender has not communicated and has not made any repayments at all, if I elect to Receive Advance Payment so that I may relend the funds elsewhere, will this affect his ability to get a loan in the future?

Lenders choosing Receive Advance Payment wouldn't prevent the borrower from getting a loan in future.
It wouldn't specifically harm their chances of being funded either, because there's nowhere publicly visible that shows how many lenders chose this option previously for a borrower.
Whether it would affect their credit limit or credit risk score I don't know, because the factors that determine those things are mostly undisclosed.
What would obviously have an impact - including on their chances of being funded, assuming they eventually repaid that loan - is the late repayments.

I would say that specifically lenders choosing that option would, at most, probably have fairly minimal effect on a borrower's credit limit and credit risk score, but let me know if you'd like me to ask Julia.

Thanks Dave, when lenders ask for an advance payment, does this money come from MLF? And if it does, does is affect the credit increment? In my case I do not know if it is a technical error but am told I cannot get a base increment because my MLF was used to pay my last loan. According to my records I repaid my loan to the last coin. I have requested through a support for the technical team to check for me. Am yet to receive a reply one week now. Please check and confirm.

Hello Timothy.
Yes, when lenders ask for an advance payment, the money comes from the MLF.
I don't know for sure whether it affects a borrower's credit limit, but I would guess any effect would be minimal. It's certainly not the cause of your issue, which I see is a technical error and is in the list of jobs to do on our Technical board. Sorry about the delay.
I've found your support ticket and replied further there.

The Members Loan Fund exists for lenders to be reimbursed--(up to a $1,000 lifetime maximum, for withdrawable lending accounts; or with no limit, for donation lending accounts)--when, as Julie mentioned, a borrower has not communicated and has not made any repayments at all, or in a long time.

Although the lender benefits, too, the *primary* purpose actually is for it to benefit *borrowers* (which is Zidisha's mission), by making it possible for more lender money to be available sooner to contribute to newer loan requests.

When a "Receive Advance Payment" button appears at the bottom of the image of the borrower on the lender's "Your Impact" screen (where all projects he/she has contributed money to, are shown), then after a lender clicks on that project, the lender receives back whatever portion of his or her contribution toward that loan didn't get paid back to him or her, and the borrower's photo and information about that particular project also disappears from the lender's "Your Impact" screen. Just like Dave, I also don't know if it impacts a borrower's credit limit or credit-risk score. I agree with Dave that if the borrower comes back and pays later--(I have seen honest borrowers who encountered a serious setback come back three years later, to pay back in full)-- what impacts it is the fact that payments weren't made in a timely manner, regardless of the reason.

The nice difference between Zidisha and a bank, as you know, is that the borrower still can take out another loan later on, after fully repaying, no matter how long it took (which is vital to some borrowers).

I never saw Julie's post until now, or I would have answered sooner. I'm sure it's the same for Dave. Apologies that we both (and others!) missed this one, earlier.

Thanks Dave and Laurie for this detailed information. At times as V.Ms we need this information in order to properly advice our Mentees accordingly. Someone said information is power. Thanks again for your efforts and commitment to Zidisha family and also for the information on my support ticket. I wish you all well.

A few things about 'Receive Advance Repayment' I have found which should be improved:
1. There is no way to easily filter in 'Your Impact' those loans which can Receive Advance Repayment. This means manually clicking through 20+ pages of my loans to check.
2. When I click Receive Advance Repayment, I lose the loan from 'Your Impact', so I can't easily see those lenders who have delayed repayment - and essentially I lose visibility of any impact I had on the loan (even if partial repayment). I'd prefer the loan to stay in 'Your Impact'.
3. Even with 'Early Repayment' ticked in my account Preferences, loans which have been outstanding for nearly 2 years are still not being automatically repaid early. You have to manually select this option.